Modi-government eyes higher capital gains tax for rich to curb inequality

India is preparing an overhaul of its direct tax laws to replace a byzantine matrix of rules and help Prime Minister Narendra Modi reduce widening income inequality if he returns to power next year, according to people with knowledge of the matter...

At the heart of the rework is potential increases in capital gains taxes for top income earners, the people said, asking not to be identified as the details are private..

For instance, while India levies a tax of as much as 30% on income, it taxes gains on certain asset classes such as equity funds and stocks at a lower rate...

Indias reliance on indirect taxes levies on consumption rather than direct taxes on capital is often cited by economists as the main culprit behind the countrys poor getting left behind even as the nation minted 70 new millionaires each day between 2018 and 2022..

With a new direct taxes code, the government is also looking to replace Indias complicated tax system with a simpler law to draw in companies looking to shift their operations out of China amid growing tensions between Washington and Beijing..

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